Now, it's less likely that the Federal Reserve will lower interest rates in July by as much as the market had hoped to stimulate an economy that appears to be running just fine on its own.

Traders are still pricing in a 100% probability of a rate cut in July, but by less than previously expected. The CME's FedWatch tool showed Friday that expectations for the Fed to lower its benchmark rate by 50 basis points fell to 9% from 29%. However, the market is still pricing in a 25-basis-point rate cut — expectations rose to 91% from 70.8%.

"Not only was the number strong enough to take a 50bp rate cut off the table, but it was also just high enough to add a shadow of doubt to a July cut as well," wrote Scott Buchta, the head of fixed income strategy at Brean Capital, in a note.

The better-than-expected jobs number came after both debt and equity markets priced in multiple rate cuts by the Federal Reserve through the end of the year. The bond market has been screaming for a rate cut for some time — a bond rally sent yields on 10-year Treasurys below 2% before Friday's report. In addition, the S&P 500 had soared to new highs on speculation that the Fed will lower rates, which would give the market even more steam to run.

Market action after the jobs report suggested that confidence in a Fed cut had faded.

"The employment picture continues to be one of the positives to the US economy," said Ryan Detrick, senior market strategist for LPL Financial. "Services and manufacturing are both slowing, but the good news is we don't see a recession on the horizon and continued strong jobs data is one of the main reasons."